China homes sales continue to tumble as Beijing’s support measures fail to shore up weak sentiment in property market
- Property sales at 24 major Chinese developers fell by 45 per cent year on year in January and 41 per cent month on month: CGS-CIMB Securities
- The property sector is entering its off-season so the effects of new support measures launched by Guangzhou, Shanghai and other cities might not be ‘immediately obvious’, analysts at China Index Academy say
Despite a slew of measures rolled out by Chinese regulators recently to boost demand for property, developers are still struggling with weak sales and reported declines of more than 40 per cent in January, according to real estate brokerages.
Home sales at 24 major Chinese developers fell by 45 per cent year on year in January and 41 per cent month on month, CGS-CIMB Securities said in a report on Thursday. The brokerage cited data from China Real Estate Information Corporation (Cric), one of the largest real estate brokers in the country.
“January property sales … were well below market expectations of some 5 to 10 per cent decline,” Raymond Cheng, CGS-CIMB’s managing director, said in a note calling for stronger policy moves to prop up the sector, such as a liquidity injection of up to 2 trillion yuan (US$281.5 billion) through direct property purchases.
“This – if implemented – could really help solve developers’ liquidity issues and digest inventory levels markedly, which will in return improve market sentiment and homebuyers’ confidence.”
The muted numbers come even as Chinese policymakers scramble to support property developers and shore up confidence. Last week, the country’s financial regulators said banks could provide qualified developers with commercial property loans in order for the companies to repay other loans and bonds. Earlier the same day, the central bank also cut the reserve requirement ratio in a bid to encourage lending and to inject liquidity into the economy.